The IoT Impacts Manufacturing, Too

There’s been a lot of discussion recently around the changing face of manufacturing, the forces causing that shift, and how those forces are leading to a world that’s smart and connected -- what some refer to as the Internet of Things (IoT). As defined by McKinsey & Company, the “IoT is embedding sensors and actuators in machines and other physical objects to bring them into the connected world.”

There are many ways that end-users and manufacturers alike can benefit from such a world. For example, the IoT lets businesses manage assets, optimize performance of those assets, and even create new business models from those same assets. But perhaps what’s most remarkable about this pervasive network of “things” is how much potential economic impact it carries.

So where does that economic value come from? Certainly there are the cool IoT consumer use cases that everyone is familiar with. The FitBit, which tells me at any point during the day just how active -- or lazy -- I have been, is a common example. My car’s fuel gauge reminds me how many more miles I can travel before I am left on the side of the road hiking to the nearest gas station. Connecting that gauge to the navigation system can help me find the nearest gas station to avoid such a fate.

Industry experts agree that one industry sector poised to see great IoT impact is manufacturing. The first point of economic impact is in how products are manufactured. The "Industrial Internet" rapidly increases the complexity of creating ever smarter, connected products. By closing the loop between early-stage engineering design activities, production processes on the plant floor, and the service organization, manufacturers can reduce errors, increase flexibility in how they manage late-stage engineering changes, reduce work-in-process, and, ultimately, accelerate new product introductions with products they'll hope can be financially successful.

When you take it one step further though, that’s when things really start to get interesting. When you manufacture that smart, connected product, it can then give you back real-time data to help maintain and service it at optimal levels. Being able to maintain a product after the point of sale gives manufacturers a “digital umbilical cord,” which allows for remote visibility, where they can interact with products whenever and wherever.

Imagine if your washing machine itself were the diagnostician, as opposed to having to schedule a service man to come to your house to determine the problem -- and then hoping that he has the right part in his truck. Imagine if the machine could detect the problem, send information back to the manufacturer through a connected service system, and alert the manufacturer to deliver a new part, which is then replaced by a licensed company professional on the first service visit. This process would not only satisfy a customer in the short term by providing a product that performs successfully at all times, but that positive experience would help establish a loyal relationship over the long term. Meanwhile, the company would stand to slash the wasteful costs of repeated service visits and overstocking parts.

Today, all signs point to the value of the IoT. It’s here, it’s not going anywhere, and it has the potential for a multitrillion-dollar worldwide economic impact by giving manufacturers an opportunity to engage customers beyond the purchase, using service-based contracts to create a partnership built around product performance.

— Lee Smith is the divisional general manager, Service Lifecycle Management (SLM), at PTC.

Lee, what you have articulated in your article is the vision that resulted in things like the Java programming language. Java was originally intended to be used in smart, embedded devices like home appliances. In fact, some of the early examples used to illustrate this included a smart toaster.

The example you give of the appliance repair scenario is a good one. Of course, it is being used on military systems and has been used in aerospace applications for a while. What is new is the availability of very inexpensive smart control systems. I was working with one, from Cypress Semiconductor, that costs only a dollar in quantity. It is a whole programmable, configurable System on Chip (SoC) with extensive I/O. It also is small and draws little power. I use it as an example, and there are many devices around that fit the bill. What makes it different is the connectivity.

Your comment about the Industrial Internet increasing complexity puzzles me, though. In my opinion, it makes it easier to connect things and automate more processes. I guess you could look at it as making things more complex becuase we can do more. On the other hand, these new things we can do are easier to do than before. Having a standard makes it cheaper and easier to integrate.

I have worked on machines that have self-diagnostics. Sometimes it works, and sometimes it doesn't. The break in the electrical circuit may be in the heater element, or may be the wiring connection at the fuse. The wiring complexity involved to monitor each element in the circuit may be too expensive to justify.

GlennA, a long time ago I worked on a R&D project for a manufacturer that involved developing a self-diagnostic system for their products. All the products had a simular structure. The system that we developed would isolate failures to end effector units or intermediate control units. This did not actually require any more wiring. The attempt was not to get down to the smallest level, but to warn of problems and isolate the area (level) of the problem.

The question that looks to me to still be unanswered is "So where does that economic value come from?" What we got as an explanation was a lame description of the value of a gas gage. Then we get descriptions about being able to make last minute engineering changes much more easily. But we are all aware that those last minute changes are mostly caused by earlier jobs not being done correctly, which certainly includes not having the correct product requirements available for the decision making stages. And, believe it or not, a whole lot of last minute changes are in the physical realm, not in the software realm, and so they require physical corrections, which still take time, no matter how fast the change notice is sent. Possibly making corrections to an assembly robotic sequence may correct some problems, but the parts to be assembled are not quite so quick to change.

IT could be quite refreshing to see a description of exactly where the increase in value would come from that was not based on glittering generalities, or stretched analogies.

What I see is the principles in an industry spreading "sunshine" to encourage investors and placate shareholders by inflating stock values. Are any able to show that it is not the way things really are?

Very interesting article. Tim O'Reilly of O'Reilly Publishing/Media company has additional information regarding the industrial internet. He's tracking the topic via O'Reilly Radar blog. Here's the weblink of all the articles on the Industrial Internet.

mrdon, I'm disappointed the manufacturer did not make their IoT device more secure, but responsibility must fall on the end user as well. It does absolutely no good to put robust security into a device if the end user leaves it in its default configuration. The person who leaves their system defaulted to Admin/password is asking for trouble.

However, do you see the absurdity of having to call an appliance manufacturer for password reset instructions because you forgot the password to your refridgerator?

The next generation of hardware needs to take a different approach. The one we're using now DOES NOT WORK.

I agree totally. I remember watching an online documentary about one of HP's printers being unprotected because the password was defaulted to a disable mode. An IT Security expert had a tough time convincing the HP VP of the security vulnerability of their product. The security expert had all sorts of data based on his research and experimentation with the product to support his findings. The final solution to this security glitch was to have a label in red letters saying, PLEASE SET A PASSWORD TO PRINTER. LOL

Good link, TJ. I was about to say that IoT makes absolute sense, especially based on the success automotive is having with self-diagnostics. But then I read your link about the refrigerator sending out spam. I agree with Mr Don when he says that it's unfortunate how a malicious few can wreck a great idea.

The article on the spamming fridge, and the example of the self-diagnostic washer got me thinking about the Ethics of the IoT. Hacking a refridgerator to be a spam-bot is an obvious ethical breach by a third party, but what happens when ethics are comprimised at the manufacturing level?

The example of the defect reporting washer states that washer manufacturers could obtain value from the IoT by implementing service relationships to the end user. So let's suppose such a relationship has been put in place by an imaginary manufacturer named Acme Washers. Their latest model the H.A.L. 9000 will not only get those stubborn grass stains out, but thanks to it's IoT connenctivity it can report a defect even before it becomes a problem for the end user. Our particular H.A.L. 9000 has dutifully reported a worn bearing, so the service tech is called, the module with the faulty bearing is replaced, and all is good. Or is it?

Unbeknownst to the customer Acme Washer's projected revenue for the upcoming quarter looks like it might come up short. The CFO leans on a VP, the VP leans on the Service Dept. Director, and then the Director leans the Service Engineers to come up with some more revenue. The Service Engineer who's barely 3 years out of school accesses the service link of several, or dozens, or hundreds, of H.A.L. 9000's who are past their warrenty dates and injects error codes. The several, or dozens, or hundreds of H.A.L. 9000's dutifully report that they need repair and several, or dozens, or hundreds of service trucks roll out to address the issues.

Even though there is nothing wrong with the washer's in question, "repairs" are conducted and since they are past warrenty the end-user gets stuck with the bill. Now a $50 repair here and there won't move a large companies numbers, but what would happen if a company could artificailly increase the failure rate of a product line from 4% to 7%, and do that over a long period of time?

As with any technological advance the IoT will bring with it a whole new set of ethical challenges. Unlike advances of the past however the impact of ethical breaches in the IoT will be incredibly far reaching, happen lightning fast, and may be very very hard to detect.

Industrial workplaces are governed by OSHA rules, but this isn’t to say that rules are always followed. While injuries happen on production floors for a variety of reasons, of the top 10 OSHA rules that are most often ignored in industrial settings, two directly involve machine design: lockout/tagout procedures (LO/TO) and machine guarding.

Load dump occurs when a discharged battery is disconnected while the alternator is generating current and other loads remain on the alternator circuit. If left alone, the electrical spikes and transients will be transmitted along the power line, leading to malfunctions in individual electronics/sensors or permanent damage to the vehicle’s electronic system. Bottom line: An uncontrolled load dump threatens the overall safety and reliability of the vehicle.

While many larger companies are still reluctant to rely on wireless networks to transmit important information in industrial settings, there is an increasing acceptance rate of the newer, more robust wireless options that are now available.

To those who have not stepped into additive manufacturing, get involved as soon as possible. This is for the benefit of your company. When the new innovations come out, you want to be ready to take advantage of them immediately, and that takes knowledge.

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